Stock Markets for April 13, 2011

Wheat review for April 13, 2011

By the end of CBOT trades the prices for May futures on wheat declined by 6 ¾ cent (1.7%), by 7.52 ¾ US dollars per bushel. The US meteorological service forecasts precipitations in the region of the Great Plains which improves expectations of the market regarding the quality of winter wheat harvest.

However, other regions of wheat cultivation (Texas and Oklahoma) are expected to get less moisture than needed that is why rainless weather will be unfavourable for harvest. Yet, traders’ attention has been focused on the news about rain in Kansas and Nebraska since there are concerns over precipitations in other US states which is to brighten the situation with harvest. Under all these circumstances traders decided to close part of long positions.

Besides, as exports data showed, The Middle East countries continued buying American wheat, in smaller volume though. It exacerbated the concerns over demand decline of demand due to high prices.

Futures on cattle grew on Wednesday amid purchases for lowered prices. Earlier futures dropped to their lows for week and a half. By the end of CME trades, April futures on cattle increased by 0.60 cent (0.51%) up to 1.1827 US dollars per pound. June contract closed with a gain of 0.17 cent having thus constituted 1.3302 US dollars per pound.

Futures increased amid weakening US dollar which has been intensifying the expectations of export demand growth, even though import demand showed decrease.

Dropping US dollar makes futures less expensive for those who operate with other currencies.
Another source of support for the market is the growth of prices for lean pork. They rose amid the prospects of seasonal decline in supply.

Market participants consider that futures growth may well continue after last week large-scale sales. On the other hand, cash prices for beef tend to decrease in mid-April as more meat comes to the market. Prices fall is indispensable for demand to grow. At the same time export sales can support the market. Yet, many traders have been expressing concerns over high wholesale prices possible to have an opposite effects.

These concerns exacerbated shortly after the US Agriculture Department announced the wholesale prices for beef to have grown by 0.43 cent per pound.

1 comment:

Market individuals consider that commodity growth may well proceed after last week huge-scale sales. On the other hand, cash costs for beef seem to reduce in mid-April as more meat arrives to the market.